Getinge AB (publ)

Thank you very much and welcome everyone to today’s conference. As Leslie [ph] said, I have Lars Sandstrom our CFO with me as well and he will present the financials a little bit later during the call.

But we can get started and move directly over to page number two please. So just want to begin by covering the key takeaways for the quarter in terms of performance and as expected, the net sales decline year-on-year as we had record breaking deliveries of ICU Ventilators in Q3 of 2020.

However, in the third quarter organic order intake increased by more than 20%, thanks to strong developments in all our business areas and all our regions, organic order growth is strong both compared to Q3 2019 and Q3 2020. The adjusted EBITDA margin amounted to 18.4% and adjusted to COVID-19 effects the EBITDA margin continues to improve.

Thanks to structural mix shift and also increased productivity for most parts of the company. Free cash flow remains the strongest one so strengthening our already a very solid financial position.

And with that, we can move over to page number three please. So let’s take a step back then and look at some of our other key events in the quarter.

We had a number of launches and other activities. So one example is that we introduced the Rotaflow II, a new product for advanced life support, the technology here enables up to 14 days of ECMO therapy in a compact format, giving healthcare professionals the flexibility needed to provide real high quality care.

In addition to this, we also launched new functionality for our Volista surgical light range. This is a feature that includes a near infrared fluorescence imaging system and is used to identify structures that need to be removed, such as cancer cells without causing damage to nerves, blood vessels and other vital organs.

In the quarter, we also acquired advanced technology in biological indicators from Verrix, an American start-up company. This acquisition follows our strategy of strengthening our consumables portfolio in the infection prevention, it has a good testing and it also is a logical follow on from our previous acquisition of Quadralene a year ago.

The product is in development phase and it’s not yet commercially available. We expect this to happen sometime during 2022.

Overall, the improvement journey for Getinge continues, so in the quarter Getinge completed its remediation work in Hechingen in Germany in accordance with the Consent Decree with FDA. This doesn’t mean that we are automatically out of the Consent Decree but it means that all entities covered by the Decree, which is Hechingen a roster in Germany and Merrimack and Wayne in the U.S.

and through all the efforts now being more forward looking activities linked to customer benefits and driving growth. The project is to expand the production capacity of DPTE BetaBags in Merrimack in the U.S.

It is also proceeding according Getinge. In addition to this, we are also increasing production capacity in Applikon to meet the growing global demand for bioreactor systems.

So this is another important growth initiatives in the company. With that, we can move over to page number four, please.

So let’s take a look on order intake development in the quarter. We had an order intake increased by 28%, sorry, 21.8% and net sales decreasing 20.1% organically.

And as I mentioned previously, we have a strong order growth mentioned -- momentum at the moment in all regions and all business areas. So that’s the reason for 21.8% organic growth.

This is due to a combination of combat effects so to speak in the wake of the pandemic. So, well, there’s a long tail of COVID effects related to ventilators and also new and higher normal level for ECMO therapy product for development and production of biopharmaceutical drugs.

From a regional perspective, the Americas and APAC order intake is growing as a result of good performance in all business areas. While EMEA growth was not as high as a result of challenging comparative figures for ventilators in Q3 of 2020.

Net sales decreased as expected due to the challenging comparison quarters Q3 last year, compared to Q3 2019, net sales increased significantly on a currency adjusted basis after the some of continued high demand for products for our life supporting ECMO therapy, bioreactors and products for Sterile Transfer, combined with a continued high sales of ventilators and a general recovery in other parts of the business. And given the robust order momentum that we have across the Board, the things look very promising for net sales in 2022.

We can move over to page number five. So let’s talk about the outlook for the rest of the year, it is based on what I just said and despite the more negative FX impact than expected especially in the first half of the year, we choose to keep the outlook for 2020, unchanged at SEK27 billion in the net sales at its lower for the full year.

You might ask, are there risks here? And yes, of course, there are.

We are still in a pandemic that we haven’t seen the life before. With the fast pace spreads right now of the Delta variants in several parts of the world and with negative effects throughout the supply chain when other industries are coming back to normal.

And we often get questions on the supply chain and how potential constraints could impact our different parts of the business in terms of delay and cost increases. As you’ve seen in the quarter, we would -- with material negative effects from cost increases and supply chain delays very well during the quarter.

I’m very grateful for the team in supply chain and the great work they’ve done there for 18 months actually now. And then just thanks to better structure and process to handle these kind of things compared to just a few years ago.

So we’re benefiting from the overall improvement program that we’ve been on for a while now there. This has materialized in multiple preventive actions mitigated the negative effects so.

At the same time, the sales organization is very disciplined on pricing, which obviously also helps the performance. If things worsen though, in the coming quarters, we may of course be affected negatively from a cost perspective, but also from a temporary net sales perspective, meaning that there can be facing of net sales forward into 2023.

The one example if the shortage of semiconductors worsen, this could of course, have an impact on us. Another example of what could happen is that large projects like greenfield hospitals are delayed due to where other parties suffering from supply constraints, we see for example, that the constructors or the building industry is having an impact on new hospitals construction and also refurbishment of the existing hospital.

So then it may happen that customers say that they’re happy with orders that they have placed, but may allow us to postpone the delivery for a while and all the other work is finished. We’ve seen some tendencies like that in the quarter and we expect that to be stored for the coming quarters as well.

So normally you will see a Q4 partly driven by really generally in Surgical Workflows especially in December that is more likely to happen this year. So I think the guidance should be seen as more like SEK27 billion and SEK27.5 billion.

With that, we can move over to page number six. So order intake amounted to SEK7,079 billion in the quarter.

In Acute Care Therapies we had 18.6% organic growth, which was SEK545 million in actual numbers. Order intake remained high in Ventilators and product for ECMO therapies in ACT.

Other product categories increase their order intake and the growth in cardiovascular surgery products slowed slightly in the quarter after results of the spread of the Delta virus in parts of the U.S. primarily.

In Life Science, we saw a 29.6% organic increase or SEK204 million in actual numbers. We saw continued strong order intake growth in the pharmacy products, which is used in production of the vaccines, for example, but of course also biopharmaceutical drugs in general.

We have good growth of bioreactors for development and production of biopharmaceutical drugs as well and we also had service growing double digits in the market. When I look at Surgical Workflows, we had a 24.6% organic increase, SEK432 million in actuals and here we have strong order growth in all regions from low levels last year, which means the order book continues to recover at a good pace in Surgical Workflows.

Growth was particularly high in Surgical Workplaces which includes mostly surgical operating rule products. We can now move over to page number seven, please.

Looking at sales and net sales amounted to SEK6,306 billion in the quarter, if we compare this with 2019, the net sales is up in actuals and significantly so if we adjust for current year. In Acute Care Therapies, we have a 31.6% organic decline or SEK1.7 billion in actuals.

The decrease in Acute Care Therapies is due exclusively to very challenging comparative figures in Q3 2020, of course, driven by Ventilators. Continued growth in ECMO therapy as well and cardiovascular products, all the growth in the latter categories slowed in the quarter as a result of the Delta virus spread, mostly again in the U.S.

Life Science, we had a 17.5% organic increase or SEK120 million in actuals. We saw continued higher organic sales growth in Sterile Transfer products in washers and bioreactors to meet the increased need for efficient and reliable technology in the development and production of the biopharmaceutical drugs.

Net sales also increased in service and spare parts, although not as much as for the other categories that I just mentioned. In Life Science also we saw growth in all regions with particularly good development in the Americas.

Looking at Surgical Workflows, we have a 2.9% organic decline or minus SEK73 million in actuals. We had continued negative developments in organic net sales, despite the recovery in order intake and this is, of course, explained by the long lead times in order to deliver in this business area, slightly coupled with delays from customers as well.

You know our special focus on the customer office offering in service and consumables continuous and continue to contribute positively to the business areas turnover, that is important to keep in mind. Currency had a negative effect -- negative impact on net sales for the group in the quarter, SEK77 million or equal to about 1%.

With that, we can move over to page number eight, please. Looking at the gross profit then, adjusted gross profit decreased by SEK1,044 billion to SEK3,334 billion in the quarter, where negative FX accounted for SEK46 million.

For the group as a whole, the gross margin decreased as a result of lower volumes compared to Q3 2020 and especially in ventilation -- Ventilators in Acute Care Therapies. And lower absorption in production units obviously a big factor.

However, the measures implemented to increase productivity partly mitigate the negative volume effects obviously. For Life Science, the adjusted gross margin strengthened by 1.7 percentage points as a result of higher volumes, a favorable mix and also better absorption in production.

And if you look at Surgical Workflows, the adjusted gross margin increased by 2.7 percentage points, primarily as a result of increased productivity and also some favorable mix effects. And this was for example in the form of increased sales and service, while we have some under absorption in the production that continued to contribute negatively to the margins.

So, with that, we move over to page number 10 and I leave over to you Lars.

Thank you, Mattias. Now looking at adjusted EBITDA, a decreased SEK868 million.

The margin was down 7 percentage points to 18.4% in the quarter and adjusted for currency, gross profit has 1.9 percentage points impact on the margin, and of course, very much impacted by the lower volumes compared to the second quarter last year. OpEx is down year-on-year, but a positive development could only because to offset the negative volume effect on the margin year-on-year and the OpEx contribution to margin is consequently minus 3.5%.

As you can see, we continue to have lower depreciation and amortization due to net assets in the balance sheet, but the decrease isn’t that large if we look in volume over here year-on-year and consequently, D&A adjusted for FX is impacting margin by 0.8%. Currency has a negative impact of 0.8 percentage points on the margin and all-in-all, this resulted in an adjusted EBITDA of SEK1,160 billion compared to SEK2,028 billion in Q2 2020.

In 2019, we were at SEK677 million and then the recently 10.9% [ph]. Then let’s go to page 11, please.

The free cash flow continues to be strong, amounting to SEK1.4 billion. This is the result of a healthy operating profit in combination with the positive contribution from reduced working capital.

Looking at the working capital days, these have leveled out somewhat, but continues to be well below 100. We are now at 90.5 days, down some 39 days from the peak in Q2 2018.

You also see a continued strong operating return on invested capital, where we are at 18.8% on a rolling 12-month basis and we start to see some kind of reverse of those, a long-term trend on return on invested capital, as net sales has started to move more into what is normal territory term. Let’s move to page 12, please.

Net debt was positively impacted by the free cash flow taking us to SEK4.1 billion and if we adjust for pension liabilities, we are SEK0.9 billion. This brings us to leverage of 0.6 times EBITDA and if we adjust for pension liabilities leverage is at 0.1 times EBITDA and cash at the end of the quarter here amounted to approximately SEK4.7 billion.

Then let’s move to page 13 and back to you, Mattias.

Hey. Great.

Thank you, Lars. So, just reiterating the key takeaways from the quarter then, we had Q3 with very strong organic order growth and broad base recovery across all our business areas and geographies.

We continue to have good activity levels when it comes to the progress and strategy implementation as well and you can see the results I think of the four years of productivity work that we’ve done here really coming to the surface now in the wake of the pandemic. Our EBITDA margin adjusted for COVID-19 continues to improve very well and with good cash flow, thanks to strong results, of course, but also really good continued work on working capital.

So, all in all, a very solid financial position going into the last quarter of 2021. And last but not least, we have passed a milestone of completing the remediation work in our Hechingen facility in Germany, meaning that we can focus much stronger now on long-term innovation activities and really creating customer value.

So, with that, I open up for questions.

Yes. Good morning.

So the first question I have is, if you could elaborate and say how many Ventilators are sold in the third quarter?

That’s a good question, Karl. I don’t have the number in front of me.

I would be get up and come back to you in a moment.

Okay. Then I can go on with some other ones.

Of course, regarding the…

I can answer that…

Yeah.

Sorry, working quickly here. The number of units for the first quarter was 3,200 units.

Okay. Thank you.

So if we move over to the cost side, I think, that is quite impressive, because I think costs was down for the group 8.5% organically now in Q3 and it was also relatively flat in Q3 2020. Can you please just provide some more info about what the drivers is behind the decrease in OpEx and how much is temporarily due to COVID and how much do you think is permanent cost savings?

Yeah. There are two main factors.

One is that there is still a lingering pandemic effect with less travel, less activities, even if that is starting to come back now. So that’s part of the explanation.

The other one is the effects of the productivity improvement program that has been going on for quite a while now where we are really learning to do things in a more productive way across the company. We don’t have any other new guidance when it comes to how much is permanent.

We said earlier that we -- the annual effect is around SEK3 million and roughly half permanent.

Okay. Thank you.

And then just the last question on the remediation side when you are finished, now I think everything is -- everything of the costs that you have been taking has been in the Acute Care side that has been expensed. Can you say anything, I think, previously you had said that around a little bit more than SEK100 million of costs that can gradually be phased out once the remediation is finished.

Is it possible to give some kind of indicative timeline for this cost savings and have some of these savings already been implemented in the organization?

Yeah. Some savings have been implemented gradually that as part of the improvement journey, especially in the sites that have been quicker with the remediation works.

So that is a positive contributor already. We’ve not quantified the effects in the total going forward.

And what we’ve said, though, is that it’s not like a step change. It’s a -- we reached a phase now where we can start to work more with productivity and lean out the system, so to speak, to have an effective quality management system in place.

It’s still a significant amount of money, but it’s going to be a gradual improvement here now that remediation is over.

Okay. Thank you.

Thank you very much and I hope you can hear me well. I’ll start with a question on the underlying gross margin in Acute Care.

You’ve been having gross margins of around 61% now in two quarters for this year. Could you give us perhaps some qualitative comments at least regarding what levels are to be sustained?

Do you see major COVID impact here or -- still or if that impact now decreases over time, should it be offset by other factors in order to sustain current levels? Thanks.

Yeah. No.

Looking at, we will come back to discussing, of course, a more long-term view when we have the Capital Markets Day. But if we look at this, we don’t -- we have of course some positive impacts from the pandemic here, we’ve seen some high deliveries of plexiglass, but we also have done the recovery on the next import that we expect to continue go into connective as well.

So and then, of course, [inaudible] has been held back quite a bit here during the year 2020 and also into 2021. And they have on average, and of course, lower margin that we see, also here the margin improvement.

So there are -- these moving parts here, but we don’t see the radical shift going forward here. Actually, we continue to work with improvements here and we’ve been kicking in one by one here in the different product areas where we are active.

And just to sort of follow up on the Acute Care side, should we, I mean, experience a reverse effect on gross margins due to lower ventilator volumes?

I think for the -- well, we are here today, yes, but where we are now we are coming down more and more slowly to more normal levels when it comes to the margin side, so there will be a further impact on costs. We don’t see huge impacts from that actually.

Yeah. Okay.

So rolling 12 months, yes, but not from -- much more from these levels?

So that you can always see up on the impact from the [inaudible].

Yeah. Yeah.

Great. Thanks.

And on the gross margin side of Life Science then and the costs that you’ve been taking or related to the Sterile Transfer ramp up in France. Any comments regarding how expensive that has been i.e., if that has mitigated some part your margin potential from the recently strong growth and what do you foresee in this regard next year when you will have two sites?

Yeah. Very healthy ramp up there that we have now, it’s mainly impacting from the French site in London [ph], where we have had significant ramp up working almost 24x7 there, of course, that comes with a cost to bring in people, et cetera.

But then when things calmed down that should have a bit of support going into next year. But then we will at the same time ramp up in U.S.

site. So, all-in-all, we do not have the significant impact, but of course, we are gradually coming back to more within or better margins there and that sounds well, but we have slight positive impact.

Okay. Thanks.

And just the final one from me, Mattias, I think, you alluded to closer to SEK27 billion net sales for this fiscal year compared to let’s say SEK27.5 billion. Could you give some more color on that, the drivers for Q4, I think, that you mentioned, Surgical Workflows, but any other comments regarding the Q4 net sales?

It’s mostly that people tend to expect a rather strong hockey stick in the fourth quarter and that’s usually driven by Surgical Workflows. What we see now with the order intake recovery and that the delivery of patterns here, it is more support for 2022, in terms of net sales then this year, so the business has kind of inherently longer lead times.

And then you have the added effect of customers wanting to delay deliveries because they are managing complex products where maybe other suppliers haven’t been able to deliver therefore. So therefore we think you will not see the same seasonal patterns maybe that you’re used to in this business…

Okay.

…that would be a facing question here between Q4 and the first half of next year.

Okay. Yeah.

Makes sense. Thanks.

Thanks a lot guys.

Second quarter is stopped due to Ventilators, the volume being lower or something else?

Sorry, sorry, Kristofer, you broke up in the beginning. Can you repeat the question?

Yeah. Just wondering about the lower gross margins sequentially in the third quarter versus the second quarter, if I look at it on a group level that might be to simplify things, but in a group says is pretty much the same gross more 52.9% versus 55% in the second quarter.

Just wondering if that difference is lower ventilator sales or other type of mix effects?

No. I think it is possible connected to the lower delivery or Ventilators here coming in, but there are also some other product mixes that are impacted, but looking at down each product areas such we don’t see a big impact we’ve seen the quarter, so we’re all more connected product mix both here but not yet mentioned.

We had a bit lower deliveries in the next two quarter, at the end of the quarter here. You could see that was also impacted here in between the quarter.

And if you don’t -- if you will not have this, you said positive seasonal effect from Surgical Workflows which is lower margin business. Is that something we should see positive then for the gross margin in the fourth quarter?

Yeah.

Yes. It is.

Yeah.

Okay. Second question also, when it comes to margin for Life Science, seeing a new higher level here in the second quarter or in the third quarter.

So is this a new sustainable level or some positive one-off effects?

There are no particular positive one-off effects related to Life Sciences. It’s a gravitation towards more profitable part of the business that actually the main explaining factor.

Okay. And my third question, when it comes to Surgical Workflow and the broker in audience pretty good considering the continued weak sales, so do you see potential for this business to be back at the 15% margin when sales are improving, hopefully, next year?

I think we take this one step at a time, we are very happy that we have a good margin improvement here, despite the headwind in that space. But we -- I want to reiterate that our first milestone here is to make this a double-digit to beat business so about 10% and if that is linked to volume clearly, and we need to be closer to the pre-pandemic levels around SEK9.5 billion or above to see this I think.

And then, of course, depending on how successful we are when it comes to control you mix rotations to watch more consumer goods continue best to work with services, there’s maybe a few good opportunities for the longer term as well. But we don’t want to stick our chin out at this point and sensing more than we have a double-digit to beat our milestone to clear first.

Okay. That’s great.

Thank you very much.

Thank you.

Good morning and thank you for taking my question. So first looking at orders, so it stated that ventilator saw significant growth in the quarter for the ACT segment.

Can you provide any quantification there and if you see any risks for deliveries going into Q4, and perhaps, in Q1 as well would be helpful? Thanks.

Yeah. We don’t disclose order intake numbers for the different product groups here.

But it has been an elevated level compared to when normal -- normally here so to speak. And we do see risks in terms of delivering going forward.

The daily fight to make sure that we have enough components that logistic systems keep operating the way they should, so it’s definitely one of the areas where we are vulnerable to supply chain disruption.

All right. That’s very helpful.

Thank you. And looking at the orders for the Life Science segments, we saw significant growth in APAC.

Can you talk a bit about developments in China and how we should think about it going forward? Is that sort of sustainable path there or was it some type one-off would be just help us to understand?

China is an important market for us for much of our equipment, both the kind of call the legacy offering in Life Science, but also the bioreactor, it’s an important part for that. So it is a good long-term trend there.

I think the main risk reward in China is probably a political model at the end.

All right. Fair enough.

And then the final one from my side, you know where hospitals being pressured from wage inflation and the constraints with staff, et cetera. How well are you able to mitigate price increases, I’m thinking particularly, as we might see rising input costs, et cetera, going into Q4 and then, perhaps, into the first half of next year as well.

How well equipped are you for offsetting rising input costs essentially?

I think we all are rather well equipped the organization both on the supply side but also on the sales side have done a good job in both mitigating cost increases as such. But also we’re keeping a close dialogue with customers about the need for raising kinds of prices in certain categories that are impacted.

So far, I think, we’ve done rather good job here and then it’s something that we need to continue for the coming quarters the way we see it.

All right. All right.

So we should think that you should be able to raise prices in most categories then I guess if that…

Yeah. Well, I think, this is active work and we’ve been successful so far.

I mean, no guarantees and it is a very fluid situation I would say, but I think we managed well far, and hopefully, we can continue to do so.

Okay. Appreciate that.

Thanks for taking my questions.

Thank you.

Hi. Good morning.

Thank you. Just a couple of follow ups.

First of all, in the Acute Care order book, that’s very encouraging, because you spoke a little to the Rotaflow launch and continuing demand. Could you just give more color on that, because clearly, I think, if we’ll sit back a few quarters ago that’s a good clip in terms of your Acute Care order book as we move out of the COVID period?

So if you give some more on that and how you can make it sustained into 2022 that would be helpful? And just a quick follow-up on the Merrimack expansion on the bags and just remind us when that should come online?

Yeah. Yeah.

Sure. No.

We are -- the ACT order book, I think, as you said is developing well. We see continued strong demand for our ECMO therapy products and the Rotaflow launches is a good addition to the ECMO, already strong ECMO portfolio, I should say.

So -- and that’s something that we expect to continue. Their own elective portfolio had started a recovery in Q2 and continued into Q3.

There we saw some weakness in the second half of the quarter, because of the Delta virus. So we expect this to be a continued recovery, but a bit more lumpy then maybe we expected in the beginning of the year.

When it comes to the Merrimack expansion, that’s going according to plan and we expect this factory to come online in most likely end of November and beginning December and commercial deliveries during next year.

That’s great. Thanks.

Yeah. Thanks very much for taking my questions.

Good morning, guys. So, first question, please just relates to the full year.

I think your sales guidance implies about SEK8 billion revenues in the fourth quarter, which would make it your largest revenue quarter, and I think historically, seasonally Q4 has had higher margins or the highest margin of the year? So, I guess, the question is, would you still expect that to be the case that seasonally we have the strongest EBITA margin this year or is there any reasons that that would not be the case, so that’s question number one, please.

Question two on Hechingen and sounds like a positive update, and Mattias, I wonder if you could just help us understand what you mean by remediated here, is this been approved and agreed by the FDA or is that view of your consultants? And I wonder if you can help us understand then what needs to happen to get the Consent Decree dissolved, I think that’s been in place for six years or so now.

So, of courses, I even have a follow-up? Thanks.

Yeah. Sure.

Yeah. if you look at full quarter we think there seems to be a strong quarter, but if you relatively speaking compared to normal year a bit weak, but still strong on EBITA margin levels without providing any more granular guidance.

When it comes to Hechingen, the work is done and it is verified by third-party consultants, but it need to be verified by FDA themselves as well. Where we have asked them to have an inspection and this is something that is likely to happen hopefully during the first half of next year.

And on the sort of expectation for Consent Decree and it’s been around a long time now?

Yeah. It’s very difficult to say, if you look at other companies that have been in the same situation, there have been observation periods, ranging from one year to five years.

And that’s not something that we can answer until the FDA have done their inspection and we see the results of this.

Understood. And question on Surgical Workflows, please.

So I think you’ve seen very nice order momentum, so 17.6% for the first nine months yet your sales are down 1% to the nine-month and I think you’re highlighting that that bodes well for 2022 growth. Can you help us understand whether this sort of order momentum that we see, double-digit order momentum necessarily translates into a double-digit topline dynamic for Surgical Workflows is does for typical lead times hold for 2022 for this division please?

Yeah. I think the lead times are a little bit extended at the moment and they’re likely to be so in the beginning of next year as well.

As we have already seen delays in the third quarter and we expect that to continue for some time going forward and that’s probably the best answer I can give you. We’ve had an average of about six months in this industry before it’s probably a little bit longer right now.

But I’ll say, it’s a very low moving parts and a very dynamic situation also, it’s difficulty to really guide you going forward.

Great. Thank you.

And last question, if I may, just on the balance sheet, obviously, some great progress in terms of deleveraging. I think now as to your leverage position it’s the lowest I think it’s been now for well over a decade, I don’t think it’s ever been this low, and I think, if I’m right, your Chairman doesn’t particularly like inefficient balance sheets?

So underlying nature of the question Mattias I mean, are you getting more interested in M&A? Are you working on any targets here that you can put your balance sheet to work some comments there would be appreciated?

Yeah. I think nobody likes an inefficient balance sheet, but it’s not that we are more interested in M&A.

We’ve always been interested in M&A also, where the balance sheet wasn’t that strong. We just have more room to manoeuvre now, it is a very active pipeline, and has been for some time as well.

The valuations are very high. So we’re and if you’re concerned about return on capital, I think one needs to be disciplined in this arena.

So variance is one of the opportunities that didn’t materialize during the quarter, we continue to be active it’s the number one priority as for deploying cash in the balance sheet.

Okay. Thanks, guys.

Yeah. The follow-up did you comment on the ventilator shipments in the quarter and what do you expect for the full year.

And when it comes to ventilator I’m also interested bit interested to hear your view now how that - how you expect that along will be yours for the pandemic - when we go into 2022. We had talked before about - lot about the potential for doing our software upgrades, et cetera?

Thanks.

Yeah. No.

I think the number of Ventilators delivered in the quarter was 3,200 and the demand has continued to be high. If we look into next year, we do expect the normalization again in the wake of the pandemic what that means is number of units is too early to say I believe.

But we are excited about the opportunities with installed base now it’s a rather sophisticated electromechanical product that can be connected and there’s a number of different services that can be provided thanks to it. There is also I think, a much higher awareness right now of the more sophisticated therapies like our NAVA technology, for example.

So - this should be a good opportunity to continue to drive growth based on this data.

So with 3,200 shipments in the quarter, what do you expect for the full year?

We haven’t changed the guidance we’ve said it should land about 12,000 this year that’s the latest update on this.

Okay. Great.

Thank you.

Yeah. Thanks for taking the follow-up just very quickly on applicant and the ramp up that you do, there production wise.

If you can provide us any sort of more color on that what that means for potential output increases into the coming years and a bit more about the short-term performance here. Is current growth rates also partly supported by a weaker last year or is this sort of a new level you see for applicant?

Thank you.

For Applikon in terms of comparing with last year, we had a very muted first half of 2020 Applikon given that they are lab focused and China is the biggest market. So in terms products that you need to think about that absolutely.

If you look at the momentum right now though, we do think that the higher growth levels that you see now are more or less sustainable. There’s some state vaccine effect in there of course, but the general trend when it comes to research for new drugs, and so on in the wake of the pandemic as well, is really strong.

So we acquired this company, assuming that it would be around 10% to 12% growth business, we expect this now to be the quite a bit higher also for the long-term.

And in terms of meeting that with increased output, what does it mean?

Yeah. No.

There’s some additional investments going on in ramping up capacity there. They’re not materially investments - in terms of capital currency for us, but if it’s really working with the supplier network to a high degree, making sure that we have the parts needed for this.

Okay. Thank you very much.

Thank you.

Yeah. Thanks for the follow-up and yes, just want to could you talk a little bit about infection control, it seems to me that this is, say lagging the recovery.

I wonder if you consider this business underperforming expectation or can talk a little bit around this and perhaps extend those comments into where are you with the low temperature sterilization initiative, particularly in the North American market and filings? Thanks.

Yeah. And I think relative to sort of your workplace, there’s a little bit less momentum, but we’re certainly not unhappy or disappointed with the evolution.

We do believe that first of all, we have very strong position in this business globally. We’ve seen good progress when it comes to service for example we are continuing to strengthen the offering as well with more consumable.

So we feel that we have good traction by nature it’s a rather lumpy business, but there’s nothing I think underlying that is negative or anything for us. I think our strategy holds and the low temp offering is under development in full swing, it won’t be ready until probably end of next year.

Where it won’t have any real impact in 2022 but the years from there, we should see a positive contribution from this it’s one of the bigger opportunities [inaudible].

No. No quarterly update can go without me asking you about the PMA for covered stent in the U.S.

and the update here Mattias we should have expected that by now I think?

Yeah. Continue dialogue with Q&A ping pong with the FDA on this, we do expect this thing to happen probably not this year, it’s more likely that this will be a Q2 outcome Q2 next year.

Okay. Thank you very much indeed.

Yeah. Good morning, guys.

I have a follow-up question regarding the remediation. And maybe you can shed a little bit light on the stent.

Apart from you know, costs are being phased out. Are there any other implications from being out to the remediation that you can talk about regarding the operations?

I mean, will it be easier for you to get products approved, et cetera?

Yes. Absolutely, I think the main positive effect is actually that we can focus all our R&D resources on real R&D going forward to developing new products rather than remediating the ones we already have.

So that’s really a key long-term effect on this where that’s the main benefit. And then of course, you have the possibility of taking down costs from the system as well.

I think the main positive to me, is that we can focus our resources on really creating customer value for the long-term.

Okay. Great.

Thank you.

Thank you.

Good, thank you very much. I think we have done the summary already.

And if we run out of questions I interpret that’s a good sign here. So thanks for listening in today and wish you a good rest of the day.

Thank you very much.